Air Products and Chemicals, Inc. (APD - Free Report) is set to raise product prices, surcharges and monthly service charges for merchant customers in North America, effective Oct 1, or as contracts permit.
The pricing adjustments include increases of up to 25% for liquid and bulk hydrogen, up to 20% for liquid argon, up to 15% for liquid nitrogen and liquid oxygen as well as up to 10% for liquid carbon dioxide and monthly service charges. The company’s move is in response to an increase in production, sourcing and delivery costs.
Air Products expects few price adjustments beyond the mentioned ranges depending on specific situations. Based on cost situations and supply/demand, helium prices will also be raised.
Meanwhile, Air Products’ shares have moved up 12% in a year against the industry’s 0.1% decline.
In July, the company raised its adjusted earnings guidance for fiscal 2018. It now anticipates adjusted earnings per share in the range of $7.40 to $7.45 (a 17-18% increase from the prior year) compared with the earlier view of $7.25 to $7.40. The company expects adjusted earnings in the band of $1.95 to $2.00 for the fiscal fourth quarter, up 11-14% year over year.
Revenues at the company’s Industrial Gases – America segment increased year over year in the fiscal third quarter supported by strong hydrogen demand and favorable merchant gases volumes. Sales in the Industrial Gases – Europe, Middle East, and Africa (EMEA) and Industrial Gases – Asia segments climbed year over year on the back of higher volumes and pricing as well as favorable currency swings.
The company remains focused on expanding its core industrial gases business. Moreover, its strong balance sheet and cash flow will allow it to invest more in the days ahead. The company has the capacity to deploy at least $15 billion for high-return investments over the next five years, which will boost shareholders’ value.
Air Products and Chemicals, Inc. Price and Consensus
Zacks Rank & Other Stocks to Consider
Air Products is a Zacks Rank #2 (Buy) stock.
Some other top-ranked companies in the basic materials space are Ingevity Corp. (NGVT - Free Report) , Celanese Corporation (CE - Free Report) and CF Industries Holdings, Inc. (CF - Free Report) .
Ingevity has an expected long-term earnings growth rate of 12% and a Zacks Rank #1 (Strong Buy). The company’s shares have rallied 63.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Celanese has an expected long-term earnings growth rate of 10% and a Zacks Rank #1. Its shares have gained 10.3% in a year’s time.
CF Industries has an expected long-term earnings growth rate of 6% and a Zacks Rank #2. The company’s shares have gained 47.8% in the past year.
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